Ask Question
27 March, 03:54

Aquata always spends 30 % of her income on dinglehoppers. Assume that her income increases by some percentage while the price of dinglehoppers remains constant (and that all dinglehoppers cost the same). What is her income elasticity of demand for dinglehoppers?

+3
Answers (1)
  1. 27 March, 05:08
    0
    Answer: Income elasticity of demand refers to the sensitivity of the quantity demanded for a certain good to a change in real income of consumers who buy this good, keeping all other things constant.

    Aquata Income elasticity of demand for dingle hoppers will be higher.

    Explanation: Types of Income Elasticity of Demand

    High: A rise in income comes with bigger increases in the quantity demanded.

    Unitary: The rise in income is proportionate to the increase in the quantity demanded.

    Low: A jump in income is less than proportionate than the increase in the quantity demanded.

    Zero: The quantity bought/demanded is the same even if income changes

    Negative: An increase in income comes with a decrease in the quantity demanded.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Aquata always spends 30 % of her income on dinglehoppers. Assume that her income increases by some percentage while the price of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers